Pa. Senate highways plan banks on boost in gas tax

By MARC LEVY,

Tuesday, April 16, 2013

HARRISBURG, Pa. (AP) -- Spending on Pennsylvania's highways, bridges and mass transit systems would get a big shot of new funding under a Senate plan unveiled Tuesday that would raise the money by increasing motorist fees and wholesale gas taxes -- bumping prices at the pump as much a quarter a gallon.

The $2.5 billion plan by Senate Transportation Committee Chairman John Rafferty, R-Montgomery, is more ambitious and expensive than the proposal Gov. Tom Corbett advanced in January. The increase is nearly 50 percent of the $5.3 billion that the Pennsylvania Department of Transportation currently spends on highways, bridges and transit.

Rafferty warned that the state's bridges and highways are in dire need of repair, and contended that the plan would simply update taxes and fees to reflect inflation after going unchanged since at least the 1990s.

"This is a sustainable funding plan," Rafferty told reporters at a news conference where he was backed by dozens of supportive lawmakers and representatives of transportation-minded groups. "This is not a one-shot deal. This is a significant piece of change that will move Pennsylvania forward."

Business groups, engineering firms, highway construction companies and labor unions support it and key Senate Democrats support it, as well. However, it could face rough sledding in the more conservative House of Representatives.

One supporter, Sen. John Wozniak, D-Cambria, warned that the political will of lawmakers to increase taxes and fees will disappear once lawmakers recess for the summer and election-year politics begin to set in.

"After June 30, not gonna happen," Wozniak said.

About $1.9 billion would go toward highways and bridges. Another $500 million would go toward mass transit systems and about $115 million would be divvied up among airports, ports, rail freight and walking and biking routes.

The plan would get its money by boosting a wholesale tax on the fuel that gas stations buy, as well as by increasing fees on registration, licenses and traffic violations. Some of the money would be used to undo a $450 million-a-year transfer from the Pennsylvania Turnpike Commission that is contributing to the commission's mounting debt bill.

The primary funding mechanism in the plan is the removal of the cap on the oil company franchise tax, which is linked to the wholesale price of gas and is presently assessed only up to $1.25 per gallon.

Rafferty's plan would gradually apply it to the full value over three years, which could mean an increase of as much as 28.5 cents per gallon at the pump, based on the average wholesale price in use for 2013. Corbett proposes increasing the same tax but at a slower rate.

The Department of Transportation says repairs are needed on more than 23 percent of the state-maintained highways and nearly 20 percent of the state-owned bridges. Meanwhile, public transit agencies are battling deficits to maintain services.

Details of Pa. Senate transportation funding plan

Senate Transportation Committee Chairman John Rafferty, R-Montgomery, released a transportation funding plan on Tuesday. Here are some details of how approximately $2.5 billion would be raised from tax, fee and fine increases and spent once the plan is fully phased in:

SPENDING

o $1.9 billion a year for state and local highways and bridges.

o $510 million a year for Pennsylvania's 36 urban and rural transit agencies

o $115 million a year for railways, airports, ports and bicycle and pedestrian programs

TAXES

o Phases out the $1.25 cap on the oil company franchise tax, a wholesale tax on the gas that gas stations buy, over a three-year period

o Reduces the 12 cents per gallon flat tax at the pump to 10 cents per gallon over two years

FINES

o Imposes a $100 surcharge on drivers who violate traffic laws, like speeding or running a red light

o Increases fines for violation for failure to obey traffic control devices from $25 to a sliding scale of $100 to $300

FEES

o Imposes $50.50 licensing fee for six years, instead of a $29.50 fee for four years

o Imposes $104 registration fee for two years, instead of a $36 fee annually

REIMBURSEMENTS

o Fully reimburses the Pennsylvania Turnpike Authority after eight years for $200 million a year for highways and $250 million for mass transit